A peek into Elon Musk’s gameplan for Tesla’s first truck charging stations

Elon Musk, the chief executive of Tesla Inc, has said little about how he plans to turn his prototype electric truck into reality.

But Reuters has learned that Tesla is collaborating with Anheuser-Busch, PepsiCo and United Parcel Service Inc to build on-site charging terminals at their facilities as part of the automaker’s efforts to roll out the vehicle next year.

Details of the partnerships, which have not been disclosed previously, are still being hammered out, but include design and engineering from Tesla, the companies said. They declined to disclose what portion of the building costs, if any, Tesla would pay, or whether Tesla would be compensated for its work.

The firms are among nine major corporations that have placed pre-orders for Tesla’s truck, dubbed the Semi.

With questions swirling over whether Tesla can make good on its aggressive timetable, news of the collaboration is a sign that corporate customers are taking the effort seriously, and that Tesla is working to solve one of the biggest impediments: keeping the big-rigs powered.

Companies that spoke with Reuters said the first step is to install charging equipment on their own premises. The Semis would be limited to routes that would get them back to home base before the batteries are spent, the firms said.

PepsiCo, which has reserved 100 Tesla trucks, said it may eventually explore sharing facilities and costs with other companies. The food conglomerate has held multiple meetings with Tesla to discuss the recharging effort, said PepsiCo executive Mike O’Connell.

“We have a lot of in-house capability around energy and engineering … and certainly Tesla brings their expertise to the table on energy and charging,” said O’Connell, senior director of supply chain for Frito-Lay North America, PepsiCo’s snack-food unit.

Separately, in a high-tech twist on the traditional truck stop, Tesla is moving ahead with plans for its own stations to sell electricity to truckers who pull up for a charge, according to customers and transportation industry executives who have discussed the matter with the Silicon Valley automaker.

Tesla already operates more than 1,100 “supercharger” stations globally for drivers of its passenger cars. Musk has spoken publicly of doing something similar for its heavy-duty trucks by installing a network of solar-powered “megachargers” that could juice up a Semi battery in 30 minutes.

But just how quickly Tesla could build a robust network of electric filling stations for commercial truckers is not clear. The company is already stretched thin and burning cash. Tesla has struggled to ramp up production of its new Model 3 sedan, which has been plagued by delays. Some analysts and trucking executives doubt that Tesla can deliver the Semi in 2019, much less a vast charging infrastructure to support it.

A Tesla spokeswoman confirmed that the Fremont, California-based company is working closely with large customers to build Semi charging stations. She declined to comment further on the arrangements or Tesla’s plans for its own truck-charging terminals.

Anheuser-Busch is evaluating installing its own charging equipment for its 40 Tesla Semis at large breweries and other key locations, according to James Sembrot, senior director of supply chain for the St.

Louis-based beer maker.

“What was important to us was to make a big investment in this cutting-edge technology and secure our place in line,” Sembrot said.

UPS, too, expects to work closely with Tesla on building on-site charging stations, according to Scott Phillippi, global engineering director for the parcel delivery behemoth. The Atlanta-based company pre-ordered 125 Semis in December.

Grocery chain Loblaw Companies Ltd will likely use solar power to juice charging stations for the 25 Semis that it has pre-ordered from Tesla, according to spokeswoman Catherine Thomas. She said Loblaw was considering Tesla as well as “a few other companies” for technology and design.

None of the companies would disclose cost estimates for building their own charging infrastructure.

US transit agencies that operate electric buses provide some clues. A “fast charger” terminal serving six electric buses would cost $249,000, according to a 2016 report from the California Air Resources Board.

But analysts and automotive industry executives said the price tag for commercial truck facilities could easily reach into the millions of dollars, depending on factors such as the number of big-rigs to be recharged, the energy source for the electricity and existing energy infrastructure in a given area.

Automaker or energy supplier?

Tesla in November unveiled its prototype Semi with the aim of upending the trucking industry. At a splashy event in Hawthorne, California, Musk said the sleek, battery-powered cab could achieve up to 500 miles on a single charge, and be faster, cleaner and cheaper to operate than conventional diesels.

Base prices range from $150,000 to $200,000, according to Tesla’s website, compared to $120,000 for a typical diesel. Companies including Wal-Mart Stores Inc and Sysco Corp plunked down deposits, getting plenty of public relations mileage in the process.

But Tesla’s most obvious potential customers – major US trucking firms – have not jumped on board.

Werner Enterprises Inc, YRC Worldwide Inc, Daseke Inc and Old Dominion Freight Line are among the transport companies holding off pre-orders of the Tesla for now, citing doubts about the Semi’s promised recharge time, range, price and payload capabilities.

Derek Leathers, chief executive of Werner, said he is not among the “naysayer crowd” that doubts Tesla’s ability to produce a viable electric truck.

“I think it’ll happen, I just think their timeline is extremely aggressive,” Leathers said.

Still, a dearth of publicly available charging infrastructure makes electrics impractical for long-haul trucking in the United States and elsewhere.

That is something Tesla’s Musk has sought to address with his plans for solar-powered “megacharger” stations. But he has provided few specifics. At the November Semi unveiling, Musk said “we’re guaranteeing” a 7 cents per-kilowatt-hour price for electricity at the facilities.

That is at the low end of cost figures cited by the US government. Solar power for commercial use costs 9-12 cents per kilowatt hour, or 6-8 cents with a federal subsidy, according to a 2017 report from the US Department of Energy’s National Renewable Energy Laboratory.

Customers and industry executives said Tesla intends to buy cheap excess solar power off the US energy grid, store it in enormous battery banks, then profit from selling it to drivers of Semis.

But that strategy carries risks, experts said.

“It’s a departure from being a vehicle manufacturer to being an energy supplier,” said Darren Gosbee, vice president of engineering at Navistar International Corp, which is working to launch an electric medium-duty truck by late 2019.

Ian Wright, a Tesla co-founder who now runs his own company making electric powertrains for industrial trucks, is sceptical that truck charging stations can be a big money maker for Tesla.

He estimated the capital costs for batteries alone would be $15 million for a single station.

“I am not seeing any profit in the energy brokering for Tesla,” said Wright, whose Wrightspeed powertrain venture is based in Alameda, California.

Malvinder & Shivinder Singh took Rs 5 bn out of Fortis without board nod

India’s tycoon Singh brothers took at least Rs 5 billion ($78 million) out of the publicly-traded hospital company they control without board approval about a year ago, people with knowledge of the matter said.

The funds were reported on the balance sheet of Fortis Healthcare Ltd as cash and cash equivalents, but the money was routed and placed under the control of the Singhs at the time, according to the people. Fortis’s auditor, Deloitte Haskins & Sells LLP, refused to sign off on the company’s second-quarter results until the funds were accounted for or returned, the people said, asking not to be identified as the information is private.

It wasn’t immediately clear what the Singhs may have used the funds for. Fortis founders Malvinder Singh and his brother, Shivinder, have been working to pay back the money so the company can release its results, the people said.

A spokesman for Fortis said the company loaned Rs 4.73 billion to “certain corporate bodies in normal course of treasury operations” as of July 2017, and in the third quarter of the current financial year those companies subsequently became part of the Singhs’ corporate group. The loans have since been recognised as related party transactions and repayment has commenced, the spokesman said in an emailed statement.

ALSO READ: Malvinder Singh and Shivinder Singh quit Fortis Healthcare board

Fortis announced Thursday that Malvinder Singh is resigning from his executive chairman role and Shivinder Singh is stepping down as vice-chairman. The brothers cited a court judgement relating to the sale of a drugmaker they previously controlled, saying their resignation would “free the organisation from any encumbrances whatsoever that may be linked to the Promoters”.

Related-party transactions

India’s Companies Act requires board approval for related party transactions, and when they exceed a prescribed size, approval from shareholders is required. Those who authorise a related party transaction without the proper approvals can be punished under Indian law with up to a year in prison or a fine of as much as Rs 500,000.

A Deloitte spokesman directed questions to Fortis, saying the auditing firm can’t comment on specific client matters due to confidentiality obligations.

Fortis, India’s second-largest hospital chain, announced Thursday it would report both its second- and third-quarter results on Feburary 13. The company reported cash and cash equivalents of Rs 5.4 billion as of March 31, compared to Rs 1.4 billion in the previous year.

The efforts to address the issue with Fortis’s balance sheet come amid mounting legal and financial woes for the Singhs, third-generation magnates of a family that traces its fortune back to pre-Independence India.

Now, the brothers are looking to sell chunks of their health care-to-finance empire as their main holding company grapples with a debt load that stood at around $1.5 billion in its 2016 financial-year filing, and has already seen one default.

In their joint resignation letter on Thursday, the brothers requested the board “look into all inter-group transactions and distance the Promoter Group from Fortis Healthcare Limited in a manner that enables continuity of the operations of the organisation”.

In Indian business parlance, the promoters effectively control a company and often hold the largest stake. The brothers own about 34 per cent of Fortis, according to exchange filings.

Delayed results

The brothers are also facing a lawsuit brought by New York-based private equity firm Siguler Guff & Co, which accused them of “syphoning” money out of another publicly-traded firm they control to help them manage their personal debts, according to documents filed with the Delhi High Court.

The small business lending arm of the Singhs’ financial services firm, Religare Enterprises Ltd, made 21 loans to a number of seemingly independent companies that routed at least $300 million back to closely held Singh firms on the same day, according to a central bank investigation of the company’s financial year 2016 books filed in Delhi as part of the suit. The Singhs have said the allegations are “completely baseless” and said they have responded to them in court.

Fortis said in an exchange filing it delayed releasing its results for the quarter that ended September 30 because its board was occupied pursuing a buyout of a Singapore-listed real estate trust that has acted as a kind of landlord to Fortis’s hospitals. On January 16, Fortis announced the exclusivity period for its negotiations of the proposed Rs 46.5 billion deal would be extended to February 12.

The siblings faced a setback last month after a Delhi court ruled that $550 million awarded against them in Singapore is enforceable in India. A Singapore tribunal has said the Singhs must pay damages and interest to drugmaker Daiichi Sankyo Co for concealing critical information during the sale of their generic drug firm, Ranbaxy Laboratories Ltd, to the Japanese company in 2008. The Singhs have denied any wrongdoing and are appealing the tribunal’s ruling. They have said they are reviewing the recent Delhi court decision.

India’s Supreme Court has ordered the Singh brothers not to sell or dilute their shareholding in Fortis until it decides on Daiichi’s petition to place a longer-term halt on asset sales by the Singhs. The siblings are contesting that ruling.

 

Walmart to invest several billion dollars for 20% stake in Flipkart: Report

Walmart Inc is in discussions to pay several billion dollars for as much as 20 percent of India e-commerce leader Flipkart Online Services Pvt, according to a person familiar with the matter.

The world’s biggest retailer would invest in Flipkart as part of a proposed deal that would increase the startup’s valuation as high as $20 billion, said the person, asking not to be identified because the matter is private. Flipkart’s valuation had been about $12 billion, according to researcher CB Insights. The talks are at an advanced stage, but terms could still change and the deal may not be finalized, said the person.The e-commerce battle in India has intensified in the past year as global competitors have zeroed in on the country’s potential — and market leader Flipkart.Amazon.com Inc. founder Jeff Bezos has vowed to spend $5 billion to gain ground in the country as e-commerce catches on, while China leader Alibaba Group Holding Ltd. has backed local upstart Paytm E-commerce Pvt. in the fray.“Walmart will make Flipkart a stronger rival to Amazon,” said Arvind Singhal, chairman of the New Delhi-based retail consultancy Technopak Advisors Pvt. “Strategically, combining forces makes sense for both.”Flipkart and Walmart did not respond to requests for comment.An alliance with Walmart would give Flipkart additional capital and retail muscle to fight back against the rising competition. Bloomberg News reported Walmart’s talks with Flipkart in 2016.

Since then, Japan’s SoftBank Group Corp. invested $2.5 billion in Flipkart, including its purchase of shares from some early investors.India is the next big potential retail prize after the U. S. and China, where foreign players have made little progress against Alibaba. India’s online market is projected to reach $28 billion by 2020, according to estimates from Kotak Institutional Equities.Walmart has few choices to expand in the market beyond Flipkart, with Amazon on one side and Alibaba on the other. Snapdeal.com, a once thriving e-commerce provider, has lost ground and support from early backer SoftBank. The Japanese company, which held almost a third of Snapdeal shares, had pushed a merger with Flipkart to create a stronger competitor to Amazon. That deal fell apart after Snapdeal’s founders raised objections.“Walmart doesn’t have much of a choice in India,” said Singhal. “They either have to go it alone or partner with someone else as Indian e-commerce has the potential to become really big.”

Ford, VW & Nissan skip Auto Expo 2018 as their exports trump local sales

Three global car majors – Ford, Nissan, and Volkswagen – are skipping the ongoing Auto Expo 2018. There is one common trend among these three companies — they all ship more cars to overseas markets than their local sales within India.

Interestingly, there are no other carmakers with operations in the Indian market that export more cars than their domestic sales. American carmaker Ford, which has two manufacturing units in the country (Chennai in Tamil Nadu and Sanand in Gujarat), has overtaken Korean carmaker Hyundai this year to become the largest exporter of cars from India.

In the first nine months of the current financial year, Ford shipped 134,575 units, registering a growth of almost 12 per cent compared to the previous year. In the same period, the manufacturer sold 62,554 units in the Indian market, registering a decline of nearly six per cent. Ford ships more than double the volume it sells in the local market.

ALSO READ: Auto Expo 2018: Carmakers using social media this time like never before

Like Ford, German auto major Volkswagen sells almost more than double the volume in export markets compared to India. In the first nine months of the financial year, it shipped 71,677 units of cars, reporting a growth of over ten per cent. However, its domestic sales in the specified period stood at 34,979 cars, with a decline of six per cent.

In the first nine months, Japanese carmaker Nissan shipped 46,502 units to export destinations while its domestic sale stood at 38,928 vehicles.

The sixth largest exporter of cars from India saw its domestic sales slip by more than nine per cent this year.

ALSO READ: Auto Expo: From electric bus to 2-seater pod, automakers showcase EV vision

There is another common trend among these three players — they are all registering a volume decline in a market that is expanding at over eight per cent. None of these three players have a market share of more than three per cent in the world’s fifth-biggest car market where over three million units are sold in a year.

Industry experts said it is not a great business decision to invest millions of rupees in participating in the Auto Expo when a company’s domestic market demand is not doing well.

ALSO READ: Auto Expo 2018: Carmakers go green to showcase future of mobility on Day 1

General Motors is the fourth global car maker that is not a part of the ongoing expo. But its case is different from the above three players. In May last year, the company decided to stop local sales of its cars while announcing its plans to focus exclusively on the export market. The company has shipped 60,707 cars from India in the first nine months of the current financial year. General Motors is now the fifth-biggest exporter of cars from the country.

 

Auto Expo 2018: Carmakers using social media this time like never before

The Indian automobile industry never used the social media the way it is doing at this edition of the Auto Expo. The organisers of the Expo, Siam and various participants have rolled out attractive teasers, campaigns and contests on social media platforms like Facebook, Twitter and YouTube. In fact, Siam claims this is the first auto show in the world where Twitter is itself a promotional partner.

Auto Expo’s Twitter handle (@AEMotorShow), with a follower base of 16,000, is abuzz with activity. There have been over 4,200 tweets on the handle. Siam is running contests by asking questions related to the automobile industry on Twitter and distributing free Expo passes to winners. The Expo opens for the public from February 9 and ends on February 14. Twitter is being used to spread information about the spots from where tickets can be purchased. Siam has also listed the names of the food majors that have set up counters at the Expo – the names include KFC, Domino’s, Pizza Hut, Burger King, Starbucks, Keventers and Haldiram’s.

As part of the collaboration, Twitter is hosting a special #BlueRoom pop-up show onsite, live stream highlights from the Auto Expo, and make available a custom Auto Expo emoji. In addition, automotive majors like Hero MotoCorp, Mahindra & Mahindra, Tata Motors and Maruti Suzuki are also live streaming their showcase at the Auto Expo on Twitter.

The Facebook page of Auto Expo has about 158,000 followers. Siam has been using the platform to talk about the attractions at the Expo, besides listing information with regard to the event. Auto makers are also tapping the potential of these social media platforms to reach out to fans and followers and create a buzz around their product showcases by releasing teasers on Twitter and Facebook.

Among the companies that have been highly active on Twitter are Maruti Suzuki, Tata Motors, M&M, BMW and Renault.

Tata Motors is running various contests and offering Expo passes to winners. It also allowed Twitterati to ask questions related to the company and answered them. It gave out details of the number of vehicles it is showcasing while mentioning its pavilion number at the Expo. Pratap Bose, the company’s car designer, has been active on Twitter, releasing various teasers of models that are being showcased. Maruti Suzuki is running contests that could get winners an all-expenses-paid trip to the Expo.

Korean car maker Kia, which is readying its India launch by next year, has been quite active, too. Hinting at its electric vehicle displays at the Expo, it tweeted: “The excitement is #electric. Are you ready for us”. It is running various contests where participants get a chance to win Kia merchandise, besides passes to the Expo. Mentioning its hall number on Twitter, the company is asking enthusiasts to visit the stall.

Most companies have used common posts and messages on Twitter and Facebook. BMW is using Twitter to invite fans to visit its stall to experience a virtual test drive besides running contests and sharing teasers. Hyundai talked about the 15 products that it will showcase and nine experience zones at its pavilion, on platforms like Twitter and Facebook.

Here’s why Mukesh Ambani’s first Jio profit is ‘too good to believe’

Reliance Jio Infocomm Ltd.’s first-ever net income is “a bit too good to believe” for Sanford C. Bernstein analysts, who examined how the phone carrier accounts for some costs.

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Jio’s “unique approach” results in a slower pace of recognising depreciation and amortisation, which led to a Rs 12 billion ($187 million) charge in the December quarter, according to a February 2 Bernstein report. Using a rate similar to local rivals would have quadrupled that number and turned Jio’s reported profit into a loss of Rs 24.1 billion, analysts led by Hong Kong-based Chris Lane estimated.

The carrier, controlled by India’s richest man and a unit of Reliance Industries Ltd., posted a net income of Rs 5.04 billion last quarter, about 16 months after its debut sparked an industry price war that crashed revenues. The result was boosted by Jio’s policy, linking depreciation charges to “its own assessment” of usage and economic benefit, while other Indian carriers amortize telecom assets at a fixed rate over time, Morgan Stanley said in a Jan. 21 report.

An email seeking comment from Jio’s spokesman went unanswered.

“It’s part of accounts engineering.

The assets will depreciate over time whether you use them or not, whether you use them partially or fully,” said Anil Singhvi, founder of Ican Investment Advisors Pvt Ltd. This approach is “just a way of saying I’m profitable sooner,” he said by phone, adding that the focus should instead be on cash flows.

Billionaire Mukesh Ambani’s telecom unit launched with free services in 2016 and went paid 10 months ago. Morgan Stanley estimates Jio will turn cash-flow positive in the 12 months through March 2020.

Bernstein analysts pinned Jio’s profit down to three factors: lower network costs possibly due to favorable tower-sharing deals, reduced interconnect fees and its method of accounting for depreciation which “stands out as an anomaly” when compared to global peers.

Jio, which had 152 million subscribers at the end of November, has elbowed aside rivals to become the nation’s No. 4 wireless carrier. Bharti Airtel Ltd. is in the top spot with soon-to-be-merged Vodafone India Ltd. and Idea Cellular Ltd. at No. 2 and No. 3 respectively.